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High Tariff on Raw Materials Cripples Steel Sector

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  • High Tariff on Raw Materials Cripples Steel Sector

The disparity in tariff between raw materials and finished steel products has brought the local steel manufacturing sector to its knees.

Currently, business is very challenging for local manufacturers in the steel value chain as they are unable to cope with a 35 per cent tariff imposed on cold rolled sheet used as raw materials for making roofing sheets and other products, while the finished roofing sheets attract only five per cent tariff.

Our correspondent learned that under such conditions, nobody was willing to manufacture locally, rather everybody found it more profitable to import the finished items.

“It is so bad that contractors are now importing roofing sheets directly because it attracts only five per cent duty,” the Chairman, Steel and Allied Products sub-sector, Manufacturers Association of Nigeria, Chief Oluyinka Kufile, told our correspondent in an exclusive interview on Monday.

He said the situation had thrown many operators into debt as many of them had been unable to service bank loans.

According to him, the government needs to sit down with stakeholders in the steel sector and review the Harmonised Systems Codes for each category of steel products.

He said the industry was currently facing crisis of not just high tariff on raw materials but the foreign exchange ban on import of steel and allied products, which had thrown operators out of business.

He said almost all the major aluminium firms that responded to the call of the government and suspended importation to commence backward integration had shut down while the few remaining ones were struggling.

Some of the major aluminium firms in Nigeria include First Aluminium, Tower Aluminium, Allo and Qualitek.

Our correspondent learnt that all four firms were struggling to stay afloat.

In February, First Aluminium reportedly hit a five-year low on the Nigerian Stock Exchange. The stock plunged 25 per cent, underperforming the NSE All Share Index, which was up by 3.11 per cent.

Our correspondent gathered that Tower, Allo and Qualitek were equally struggling to remain in business.

The same situation applies to firms that used aluminium coils for colour coating; 15 of them are said to have gone underground.

Of the foundries in Nigeria that smelt iron, only a few are still in existence out of a reported 2,000 that operated in the country, our correspondent gathered. The scenario is the same for metal fabricators.

Kufile recalled that when the tariff on annealed sheet was increased and the manufacturers of enamelware, shovels, wheelbarrows and others found it hard to cope, the association met with the government and persuaded it to assign a different HS code for the annealed cold roll so that the tariff would be reduced and the small scale producers could retain their jobs.

But the entire arrangement was cancelled a few weeks after the government had approved it and annealed steel was thrown into the list of 41 banned items, resulting in over 10,000 job losses in that sector alone.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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MTN Nigeria, Gameloft Partner to Increase Access to Variety of Exciting Games

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MTN Nigeria announced it has partnered with Gameloft, a leader in the development and publishing of games, to increase access to a variety of fun and exciting games online.

The telecommunications giant in collaboration with its new partner, Gameloft announced the launch of MTN Gameworld, a new gaming platform for its subscribers.

According to MTN, the new platform will allow the Nigerian growing gaming community access to a lot of unique games online through an extensive premium catalogue from Gameloft and other renowned publishers.

Commenting on the partnership, Srinivas Rao, the Chief Digital Officer, MTN Nigeria, said, “We are constantly seeking to deliver innovative products that support the aspirations of our customers, whilst delivering superior user experience. This partnership allows us to provide our customers with access to a variety of exhilarating games from Gameloft and other leading publishers at an affordable rate.”

MTN Gameworld will allow subscribed customers access to a variety of games, which they can play at subsidised data rates through the MTN Gameworld app. Android, iOS and Windows phone users can subscribe via SMS, app, web, USSD menu (*447#), 131 USSD menu and any other MTN customer channel.

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President Buhari Commissions 5,000bpd Modular Refinery Built in Imo State

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President Muhammadu Buhari on Tuesday commissioned the 5,000 barrels per day modular refinery built by Waltersmith Group in Imo State.

President Buhari, who commissioned the new modular refinery virtually, said the refinery will enable Nigeria to export petroleum products to neighbouring countries and other markets.

The 5,000 barrels per day Waltersmith Modular Refinery is the first phase of 50,000 barrels per day combined capacity plant planned for Imo State, according to the Group.

Buhari commended Waltersmith Group, an indigenous oil firm, and the Nigerian Content Development and Monitoring Board for the collaboration that led to the actualisation of the modular refinery.

President Buhari, therefore, directed the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation, the Department of Petroleum Resources and all other relevant government agencies to provide Waltersmith all the necessary support in terms of access to crude oil and condensate feedstock.

Buhari said, “We rolled out our refining roadmap in 2018, to address challenges in the downstream sector. After many years of government giving out modular refining licences without any coming on-stream, we are today seeing a commissioning within two years.

“The plan to commence the expansion of this refinery to 50,000bpd capacity, to refine crude oil and condensate, is a demonstration of the economic reform Nigeria is undergoing.

“The realisation of the refinery roadmap will ultimately lead us to becoming a net exporter of petroleum products, not only to our neighbouring countries but to other wide markets,” he said.

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Elon Musk Net Worth Jumps by $100 Billion this Year to Topple Bill Gates, Mark Zuckerberg, Others 

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Elon Musk, the Chief Executive Officer and founder of Tesla, is now the world’s second-richest person following another surge in the price of Tesla share.

Musk total net worth jumped by $7.6 billion to $110 billion between November 16 and 17 to dethrone Facebook founder, Mark Zuckerberg, from the third position.

Since then, Tesla stock has been on a bullish run and in the last 24 hours added $7.24 billion to Elon Musk’s total net worth, according to Bloomberg Billionaire Index. Bringing the billionaire’s total net worth to $128 billion.

Elon Musk’s net worth rose from just $28 billion in January 2020 to $128 billion on November 24, 2020, representing an increase of $100 billion, the highest by any billionaire.

Musk has finally toppled Bill Gates as the second richest person and for the first time, Bill Gates is the third richest man in the world. This is the first time in almost 40 years that Gates will be in the third position.

Billionaires listed on Bloomberg Index have collectively gained $1.3 trillion this year.

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